South Korea’s largest cryptocurrency exchange hacked

Bithumb has claimed that $31.5 million worth of virtual coins were stolen by hackers.

South Korea-based cryptocurrency exchange Bithumb briefly suspended its deposit and withdrawal services after hackers stole over $30 million worth of virtual currency, the company said on Wednesday.

The exchange, which is based in Seoul, conveyed the message to its followers on Twitter in a series of tweets on June 19, including one confirming that the stolen coins would be covered by Bithum’s own reserves. It also confirmed that all users’ assets would be transferred to a different wallet system.

(Source: Twitter) Series of Tweets from Bithumb confirming hack

The transferred assets were quickly placed in a cold wallet – a method used for the long-term storage of a large amount of money/cryptocurrencies that is only connected to the internet when making a transaction – to decrease the likelihood of further funds being stolen.

Worryingly, this is the third hack on Bithumb – South Korea’s biggest cryptocurrency exchange – in the past year and the second major incident to have hit a South Korean cryptocurrency exchange following the hack on Coinrail on June 10 that saw a reported $37 million worth stolen.

Following the news of the Bithumb hack the value of cryptocurrency crashed on the markets before recovering quickly by the end of the day.

Charlie Lee, the founder of Litecoin, told CNBC that the drop in price was a very expected reaction to the recent hacks on the virtual currency market. He also stated that while a five percent drop is a lot in terms of the traditional stock market “it’s like nothing in the crypto space”.

One reason put forward for the quick recovery of the market is thanks in part to the quick response of Bithumb along with their commitment to pay back the losses to users.

Police in Seoul launched an investigation into the theft, including collecting data from the company’s computers.

The recent hacks on the cryptocurrency industry have led for renewed calls from the public for the government to implement tougher regulations. It comes on the back of a move by Seoul in January 2018 that banned the use of anonymous bank accounts for buying and selling virtual currencies.

written by Shane Curtis, ESET

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s